The WTO Stalemate: One very big "no"

Taking the Message Inside 

In addition to the protests in downtown Cancún and the smaller actions on the streets just outside the convention center, many activists penetrated the meeting site—all entirely legally. The WTO accredited some 980 non-governmental organizations, though they were not allowed near the rooms where negotiations were taking place. There were also well over 1,000 reporters using the media center, which had generous banks of computers, printers, fax machines, and DSL lines. Only 200 NGOs were given passes to the opening ceremony, but about 30 of them made good use of the opportunity by standing with their mouths covered by black tape, holding signs with messages like “WTO Obsolete” and “WTO Undemocratic,” as Director General Supachai Pantichpakdi spoke. Security guards isolated, but did not accost them, so they chanted “shame, shame” as they filed out of the hall. 

A press conference on agriculture by the Deputy U.S. Trade Representative was interrupted twice the next day by activists denouncing the anti-farmer, pro-corporate policies of the U.S. government and the WTO. A few hours later, a notice tacked onto the video bulletin board listing upcoming press conferences read: “Because of an incident on September 11, NGOs will no longer be allowed to attend press briefings.” 

The Group of 21 countries, or G-21, held a press conference on Tuesday, September 9. The foreign minister of Brazil, the deputy trade minister of China, and trade ministers from India, South Africa, Argentina, and Costa Rica gathered to announce the group’s determination to stick together throughout the conference. The group had formed in response to the WTO Secretariat’s release of an “official draft text” for the Cancún summit. That document was based almost wholly on a joint submission by the United States and the European Union and was widely attacked for ignoring the concerns developing countries had been expressing since the Doha ministerial where the terms of the negotiating “round” were laid down. 

The group’s agenda was fairly narrow—insisting on cuts in Northern countries’ agricultural subsidies and greater access to Northern markets—and the speakers at the press conference dwelt on their determination not to succumb to inducements or threats from the Northern governments designed to erode their unity. The group’s de facto coordinator, Brazilian Foreign Minister Celso Amorin, said, “We will keep our unity, which will be tested repeatedly, starting from this very moment.” They also emphasized the significance of the constituency they represented—63 percent of all farmers and 51 percent of the world’s population. 

The seriousness of the challenge represented by the G-21 was made clear by the intensity of the campaign launched by delegates from the U.S. and the EU to discredit or split the group, and to bribe other countries to pledge not to join. But by the end of the conference the only changes were the departure of El Salvador, its right-wing government successfully bribed, and the addition of Nigeria and Indonesia. Population isn’t everything, of course, but in adding up the numbers after that realignment, the G-20+ (as it came to be called) ended up representing over 60 percent of the world’s population (the list on September 15 was: Argentina, Bolivia, Brazil, Chile, China, Colombia, Costa Rica, Cuba, Ecuador, Egypt, Guatemala, India, Indonesia, Mexico, Nigeria, Pakistan, Paraguay, Peru, Philippines, South Africa, Thailand, and Venezuela). 

As negotiations dragged on and after the talks collapsed, U.S. officials blamed the G-20+, though seldom by name. According to people who saw his final press conference, the lead U.S. delegate, Robert Zoellick, was clearly driven to distraction by the Southern-led collapse of the talks. His threats to shift the U.S. focus to bilateral trade treaties, such as those recently concluded with Morocco, Singapore, and Chile, seem likely to go forward, even though the EU and WTO officials say they further complicate the global system. The U.S. has already been moving forward in negotiations for sub-regional pacts, like the Central U.S. Free Trade Agreement and a Southern Africa Free Trade Agreement. The U.S. has nearly unlimited leverage in those sub-regional and bilateral agreements and can maneuver countries into giving in on more issues than are even brought up at the WTO. Chile, for example, pledged to abolish its capital controls, which were long pointed to as the model for Southern countries wanting to exercise some control over “hot money” foreign investments that can be quickly pulled out of a country at the hint of panic. 

Tempting as it may be to see the governments of the G-20+ as warrior-heroes facing down the evil empires of the North, we should not lose sight of the fact that they are all political formations too, many of them unsavory or at least as prone to self-serving, corrupt actions as our own. India’s fundamentalist-fascist government is not likely to become a progressive model as a result of being a leader in the G-20+ and China is not going to adopt a new conception of human rights. Toward the end of the Cancún meeting, there were rumors—still unsubstantiated—that certain countries in the G-20+, including Brazil and China, were eager to find a way to make some sort of deal. 

A case could be made that the real mavericks, the ones who took the decisive position that halted the meeting, were those in what became known as the G-32 or G-33 (call it G-30+ for consistency). Drawn largely from the ACP group (Africa-Caribbean-Pacific, from a trade treaty between the EU and the more impoverished exporting nations), the G30+ was usually represented by Indonesia and did have other overlaps with the G-20+. But the bulk of its membership was the poorest countries, particularly in Africa. In distinction from G20+ groups, that sought cuts in Northern subsidies and access to Northern markets, the G30+ focused on “special products”—that is, identifying a range of agricultural commodities, perhaps different from country to country, that governments could protect without penalty. 

The G-30+ did not have the high profile of the other group, but in political terms its aims—maintaining unity in the face of intense pressure from the North—were similar and its success at least as great. There were efforts to unite the two groups and reports that a large group of African countries was close to joining the G-20+ as a bloc. In the end, they were not persuaded in time, but the two groups were clearly cooperating strategically. The take-home idea from Cancún will be, as intended by both the G-20+ and the G-30+, that the South will not be easily broken in future trade negotiations at the WTO and perhaps other fora as well. Even if all the “Gs” become obsolete in a matter of months, it is that specter that will haunt Zoellick and his EU counterpart, Pascal Lamy, from now on. 

Anatomy of the Final Standoff 

In analyzing Cancún, few commentators have questioned the notion that one of the Southern-country blocs is responsible for the “failure” at Cancún. The implicit idea, made explicit by some, is that all of the Southern governments have simultaneously been captured by “radicals.” Deputy U.S. Trade Representative Josette Shiner went on the PBS “NewsHour” with Jamaica’s chief negotiator, Richard Bernal, and said she thought the developing countries were getting poor advice from NGOs like Oxfam. Apart from the bold effrontery necessary to go on national television and accuse a high-ranking official from another government borrowing his positions and strategies from an NGO, Shiner seemed to be asking viewers to accept that every Southern country from Mali to China was also content to leave their strategizing and policy making up to Oxfam. 

It’s not that all the governments of the G-20+ and G-30+ were suddenly infected with anti-imperialist fervor. Most of them want to make trade deals with the U.S., EU, and Japan—many desperate to do so to get more hard currency. But the recognition that the WTO, and the entire global economic system, is rigged to keep them in the role of suppliers of cheap labor and cheap commodities has finally become undeniable, even for trade and commerce ministers trained at schools like the London School of Economics or veterans of places like the World Bank. 

Whether one considers the collapse promising or distressing, it should be clear that the real obstructionists were the Northern countries. The U.S. took the lead in remaining unmoveable on agriculture concessions and the European Union and Japan staffed the barricades on the “Singapore issues.” It was the North’s unwillingness to give any ground, not the new insistence by the South that they deal openly and fairly, that prevented progress toward an agreement. 

When the WTO was created in 1995, at the culmination of the “Uruguay round” of talks under the predecessor organization, the General Agreement on Tariffs and Trade (GATT), the U.S. and its allies successfully insisted on the inclusion of a number of issues that had been excluded from GATT talks. Notable among those were agriculture, the General Agreement on Trade in Services (GATS)— which applies to commerce in everything from insurance to water provision to postal delivery and has yet to fully come into effect—and Trade-Related Intellectual Property Rights (TRIPS), or patents, which has been the source of the international debate on pricing of HIV/AIDS medications and other life-saving drugs that can be manufactured cheaply by producers of generics. That last controversy was temporarily resolved just before Cancún with an agreement between the pharmaceutical industry and the U.S., EU, Brazil, South Africa, and Kenya—an agreement widely, though not universally, denounced by HIV/AIDS advocacy groups. 

The inclusion of each of those issues, which, with the exception of agriculture, had not been considered part of “trade,” in the new WTO was considered a significant concession by many developing countries. Government procurement, competition policy, trade facilitation, and investment were successfully put off until the first WTO summit, held in Singapore (hence the “Singapore issues”). 

Although agriculture got the great bulk of the attention during the meeting, it was lack of common ground on the Singapore issues that led the Mexican hosts to declare the meeting over. On those issues, the G-30+ were standing by the terms agreed to at the 2001 summit in Doha; it was the EU and Japan (and, oddly, South Korea, which swings between Northern and Southern identities) that took a hardline position and refused to budge. 

In Doha, under pressure to show support for the United States in the weeks after the September 11 attacks and to send a “reassuring message” to the global economy, the countries of the South were reluctantly drawn into an ambiguous declaration initiating the “Doha development round” of negotiations—so named as an inducement to the South, which was told that the rich countries would allow the development needs of the poorer countries to weigh more heavily than the usual imperatives of corporate profit during this round of talks. In the run-up to Cancún, many commentators and Southern country officials complained that the North had not carried through on its promise; by the time they got to Cancún the cynicism of that pledge was old news and hardly even mentioned. 

Doha ended in a chaotic jumble after several extensions of the final session, ultimately reaching 38 consecutive hours. Having exhausted their counterparts from smaller delegations and won a number of concessions, the U.S. and its allies finally had to make one concession, by accepting the Indian government’s insistence that negotiations on the “Singapore issues”—the effort to agree on common rules for investment, competition policy, government procurement, and trade facilitation, etc.—could go forward only if and when WTO member countries approved with “explicit consensus.” 

Almost no Global South countries declared themselves in favor of opening negotiations on any of those issues. Coming into Cancún, 70 countries joined in an unequivocal rejection of taking them up. During the course of the meeting that number swelled to 90. It seemed that no one could possibly argue that an “explicit consensus”  existed. 

The World Development Movement, a British NGO, clearly knew better. The EU wanted all four issues to go forward, so the WDM made badge holders—the nylon necklaces that hold picture-identification credentials at meetings like the WTOs—with the phrase “explicit consensus” printed in English, French, Spanish, Arabic, and Hindi. They were widely distributed and became the subject of a ban on the conference’s fourth day. Security personnel were ordered to confiscate them at all entrances for several hours, until someone pointed out that the action would probably not pass a Mexican constitutional test. 

The WDM folks weren’t the only ones that arrived with props. From out of nowhere a document from the government of Niger, which seemed to express interest in supporting the Singapore issues, started circulating; it was soon revealed to be out-of-date and from a low-level bureaucrat. Then Togo, a tiny country with the longest-reigning dictator on the African continent, indicated it would support the new issues. The rest of the African countries repudiated Togo’s stand. 

The EU stuck by its position. Never addressing the question of “explicit consensus,” Pascal Lamy, together with his Japanese and Korean counterparts, insisted that a commitment to begin negotiations on the Singapore issues should be included in the final declaration. A last-minute offer by Lamy to drop the two more controversial issues—competition policy and investment—was not enough. The G-30+, and many other countries as well, saw the EU position as an unbearably arrogant dismissal of clearly-articulated positions by a majority of WTO member countries. After quick consultations with its African partners, the Kenyan delegation was the first to say that there could be no compromise with Lamy and a member of the delegation was sent to the media center to tell the throng of reporters, “It’s over.” 

What’s It All Mean? 

The simplest assessment is that it means no changes in the status quo: the round is stalemated for now, though there will be attempts, however faint, to revive it in Geneva in the months to come. It means the next WTO summit, set for Hong Kong in either late 2004 or early 2005, could be the last gasp of the Doha round. The WTO may become more of an administrative body, interpreting treaties and adjudicating disputes, rather than hosting negotiations. 

For Northern governments it can be taken as a sharp repudiation of the coercive negotiating tactics they have used since Southern countries first entered the GATT. There have been calls from many parts of Europe for Lamy to resign. A different perspective is offered by The Economist, the British weekly of the elite classes. For its editors, Cancún is the most vivid sign that Southern countries have been given too loud a voice. It recommends following the lead of the Bush administration, with its firm squelching of Africa’s request for slightly expanded board representation. 

For Southern governments it is positive reinforcement for the impulse to at last refuse the exploitation of the North. For people in both the North and South, it’s good news. It means a greater chance for peace, fair trade, decent livelihoods, dignity, healthy food, a more sustainable ecology, and a global sense of solidarity. For the global justice movement, Cancún takes its place in the honor roll of victories that includes Seattle and the freezing of the Multilateral Agreement on Investment (MAI) in 1997-98. Ironically, it was the attempt to revive the MAI in the form of the Singapore issues’ investment provisions that sealed the fate of the Cancún talks.  

Cancún should be publicized as a major victory for the global justice movement, even though the result was not precisely a direct result of the movement’s efforts. However, the resolve of government negotiators in Cancún to stand up to the Northern plutocracy was undoubtedly created, in part, and significantly reinforced by the pressure mounted by the movement. From the policy wonks at organizations Focus on the Global South, Third World Network, ActionAid, and, yes, Oxfam, to the vivid, courageous, and persistent street demonstrations proclaiming an abiding belief in “people before profits,” the movement was indispensable to the triumph in Cancún. 

If the movement is able to sustain momentum and pressure, it may be the beginning of a positive shift in the way governments deal with social movements, with their own constituents, and with those who would exploit their people; it may even be the start of the political paradigm shift so many have been working for. 

Lest the movement give in to the temptation to euphoria, it should be said that history would suggest that preparing for betrayals and buy-offs would be a good idea. But it should also be said that there are other indications of a positive shift. In the same week as the Cancún meetings, Argentina was able to negotiate a new deal with the IMF to re-schedule its massive debt to the institution. By exercising its power as a large debtor (when you owe the bank $100, it owns you; when you owe the bank $100 million, you own it), and wielding the support of its neighbors and others, Argentina successfully resisted most of the key demands made by the IMF, including dramatic hikes in utility rates and increased mortgage foreclosures. Such successful bargaining is practically unheard of at the IMF and, together with the news from Cancún, it suggests that when the power of public opinion is brought to bear on governments, governments will sometimes stand up for their people—and that the centers of the North’s concentrated power can be overcome. 

Finally, all eyes turn to Miami, where trade and foreign ministers from around the western hemisphere will gather in mid-November to continue negotiations on FTAA. Continued success is necessary there to preserve the momentum from Cancún. The “buzz” about the event across North America’s activist communities is probably the loudest it has been since Seattle and promises a very interesting few days (November 17-22). The key to Miami, from the insider’s perspective, is the position of the Brazilian government. With Brazil’s new president, Lula da Silva of the Workers Party, there are reasons for optimism. But Lula has also made alarming noises about wanting to have the FTAA in place by 2005, even as other signals suggest a desire to subvert the plan. Brazilian activists are uncertain about where Lula will finally come down on trade with the U.S. The stakes are very high this time: Miami will tell us a lot about the future of globalization. 

Soren Ambrose is with the New Voices on Globalization/50 Years Is Enough Network. Photos in this article by Orin Langelle.